Information on Merchant Accounts,
Ecommerce and Credit Card Processing

May 10th, 2006 by Jamie Estep

Paypal Mobile Payments

Filed in: 3rd Party Processors, Industry News |

Paypal is now offering a system that lets members send payments via their mobile telephone. The system operates securely, and transactions still carry Paypal’s limited protection. There are several companies that already accept paypal mobile payments, and there are also a number of charitable organizations ready to accept donations.

What a great idea right?

Actually, I cant really see any use for a mobile payment system like this, neither as a pier to pier or a consumer to business system. Obviously, businesses that operate in mobile environments make great use or mobile processing. But as for a consumer, breaking out a cell phone, calling paypal, entering the transaction information, waiting for their confirmation phone call, entering your pin number, and then hoping that everything goes through correctly just seems like excessively complicated for most people to want to do. Secondly people are never quick to adapt to a new idea, no matter how great it may seem. If the internet were a bit less convenient, then maybe this system could have a running chance, but In my opinion, this is a flop. Time will tell..

News Article: Paypal launches Paypal Mobile


May 5th, 2006 by Jamie Estep

Merchant Account Google Ranking

Filed in: Industry News |

Well, the blog has finally started to rank in the search engines. It has been drawing traffic from small obscure search terms for a while, and I just found it climbing the ranks for a much more competitive search term, ‘merchant account’ and ‘merchant accounts’. Looks like its ranking 45 and 66 right now, and since it was nowhere a month ago, that’s a huge improvement. Anyway, thank you to anyone who is linking here, and thank you to anyone who stops by the blog.

As always, let me know if there are any topics you would like to see on the blog.

Thanks
Jamie

Merchant Account Search Ranking


May 1st, 2006 by Jamie Estep

Finding a Bad Merchant Service Provider

Filed in: Ecommerce, Merchant Accounts, My Favorite Posts | 1 comment

Trust Me
There are so many merchant service providing companies in the US, that searching for a good one can seem like an overwhelming task. Nearly every provider you encounter will be offering their version (or the same version) of what they can do for your business. In the world of merchant services, there are a few good companies and there are a lot of bad companies. A bad company is what I would define as a company that is looking to rip off unsuspecting businesses. New business owners are often so busy planning the other parts of their business, they become an easy target.

How do you find out if the company that you are going to trust your money to is a good company?

(more…)


May 1st, 2006 by Jamie Estep

Scan Alert PCI / CISP

Filed in: Ecommerce, Fraud |

About a day after I published the article about PCI and CISP compliance, Nigel Ravenhill, the Marketing Director for Scan Alert contacted me about the article.

A Little about Scan Alert:
Scan Alert is by far the leader in PCI / CISP scanning. They offer PCI / CISP scanning for just about every type of online business imaginable. Scan Alert serves 72 countries and offers packages for anything from non-profit, to mega websites. Scan alert customers also get to display a hacker-safe logo on their websites letting visitors know that their website is scanned daily and the transfer of information is secure.

Nigel also sent me last years Digital Window Shopping Report, which is a study involving shopping cart abandonment on ecommerce websites.

I have personally heard positives and negatives to using any Scan Alert like program, but their Digital Window Shopping Report has some great statistics about visitor behaviors and website usability.

Download the Digital Window Shopping Report

This is last years report. This years is scheduled to be released any day as I have been told.


April 29th, 2006 by Jamie Estep

Wikipedia Merchant Account Updated

Filed in: Industry News | 1 comment

The merchant account service of the wikipedia was finally updated. The section was severely lacking in a quality definition of what a merchant account is, and has now been updated. I took a look at the article and it is incomparably better than it was before. I personally dislike the entire concept of the wikipedia, but as long as there is going to be something about merchant accounts in there, it may as well be accurate.

The owners of http://www.merchant-account-services.org/ are the responsible party for the update. Well done…

A link to the merchant account page: http://en.wikipedia.org/wiki/Merchant_account


April 28th, 2006 by Jamie Estep

Do you pay for refunding customers?

Filed in: Merchant Accounts | 3 comments

Having a good payment processor is a paramount requirement to having your merchant account run efficiently and as low cost as possible.

The reason I say this, is that there are a number of payment processing companies that charge businesses for processing a transaction and for refunding a transaction. To me this sounds absolutely absurd. A business has to pay to process a credit card. Lets just say it costs 2% to process that card. Sometimes customers make returns. Its just a simple fact of business. Now, when you go and refund your customer’s card, its bad enough that the original 2% is not refunded to you, but to pay an additional 2% to send the money back to the customer is insane.

I’m not referring to a transaction fee for this. A transaction fee has to be charged on transactions in either direction. Transaction fees are fees for accessing processing networks, they are charged both directions because the processing networks are queried on charges and returns. I’m referring to processing fees, that % per transaction being charged both directions.

This is bad service plain and simple.


April 21st, 2006 by Jamie Estep

Verifone to acquire Lipman

Filed in: Credit Card Equipment, Industry News | 1 comment

This is probably the biggest news in many years relating to the credit card processing equipment industry. Verifone Holdings Inc. is set to acquire Lipman Electronic Engineering Ltd in a merger of 2 of the largest processing equipment manufacturers in the world.

Lipman is the 3rd largest processing equipment manufacturer in the World, while Verifone is the largest. Lipman manufacturers the popular Nurit line of processing terminals, and while Lipman is only the 3rd largest market holder in land-line processing equipment, they are the undisputed leader in wireless processing equipment having a 90%+ market share in wireless terminals. Verifone’s wireless terminals have been accepted in other countries but are very limited in their use in the US. This appears to be a very smart and well founded acquisition for Verifone.

Hypercom who is the 2nd largest equipment manufacturer in the world, will look dwarfed by the size and market share in every area of Verifone. Hypercom’s terminals are very easy to use, reliable and low cost, so they appear to be in little danger for the time being.


April 21st, 2006 by Jamie Estep

Shopping Cart Software

Filed in: Ecommerce |

I have made a list of available shopping cart software. The list is broken into free and paid, and separated further by the programming language that the cart is written in. Please let me know if you have a good shopping cart program that isn’t listed.

Ecommerce Shopping Cart Software


April 18th, 2006 by Jamie Estep

Processing Equipment Lease Cost Calculator

Filed in: Credit Card Equipment, Merchant Accounts, Tools |

I finally got around to programming another simple tool.

The lease cost calculator will show how much the total cost of leasing processing equipment will cost, and will also show you how much money you save by buying equipment outright. There are about 25 common terminals programmed into it, and the price for those terminals was obtained from the equipment that we sell or one of our competitors sell. This way, I know that the piece of equipment is readily available at the listed price.

Processing Equipment Lease Cost Calculator


April 17th, 2006 by Jamie Estep

The History of Credit Cards

Filed in: History, Merchant Accounts |

Credit card history can be traced as far back as the 1890’s in Europe. Credit itself historically dates back to 1700’s.

Texaco CardCredit cards were first used in the 1920’s in the United States where individual companies such as oil firms and hotel chains began issuing them to their customers. These cards were proprietary, and were more similar to what we would now call a loyalty card. The great depression, followed by world war two, created an enormous setback in the advancement of the credit card industry. This industry did pick back up when the country was back in a more stable condition at the end of world war two.

The first issued credit card appeared in the 1946 when Diners Club issued the Diners Club card in the United States. Diners Club cards were targeted at the restaurant industry, where patrons could pay with their card which was billed by Diners Club. Unlike the proprietary cards of the 1920’s, Diners Club cards could be used at any restaurant that accepted them. Diners Club cards are still used today, although the number of people using Diners Club cards has greatly depreciated over the years.

BankAmericardIn 1958, Bank of America and American Express both issued credit cards. These credit cards, The American Express Card, and the BankAmericard were the first bank issued cards, and their success was apparent almost overnight. In 1966, Bank of America allowed licensing of the BankAmericard card to help spread the BankAmericard, and settle and collect on a widespread basis. BankAmericard was later changed to the Visa card to separate the name Bank of America from the name of the card.

MasterCharge CardAlso in 1966, fourteen US banks formed an alliance called Interlink which enabled the ability to exchange information on credit card transactions. BankAmericard had virtually an exclusive market share until 1967. In 1967, MasterCharge, now known as MasterCard was a created as a collaboration in response to the success the BankAmericard. MasterCharge was made by 4 California banks, called the Western States BankCard Association.

Interestingly, both Visa and MasterCard were started as non-profit organizations. Visa and MasterCard issue credit cards through participating banks, which are for-profit. Visa and MasterCard board members were run by high ranking bank executives and were the governing bodies over the issuing of cards to their respective customers. BankAmericard was changed to Visa in 1976, and MasterCharge was changed to MasterCard in 1979.

In 1979, magnetic strips were added to the back of credit cards, in response to the creation of the electronic credit card terminal. The ability to process transactions electronically was another turning point in the evolution of the credit card industry.

See -> History of the Credit Card Terminal

By the mid 1970’s, banks had an unchecked power over issuing credit cards, and sending active cards through the mail was not an uncommon practice. During this time the government was forced to step in and regulate the issuing and collecting of credit cards. Again in 1995, the government was needed to regulate the amount and quantity of fees that banks could charge their customers. Banks changed penalty fees from $5 – $10 to $30 or more without precedence. Several court cases including the Smiley vs. Citibank case which went to the supreme court, caused the government to look closer at the practices of banks and their assessment of fees on their customers. Fees are interest rates which are still rising today, are watched very closely by the government to help protect consumers.

Credit card issuing, collecting, and acceptance are now regulated by several government bodies including the FCC (Federal Communications Commission ) and the FTC (Federal Trade Commission).

From the 1970’s through today, credit card issuing and acceptance have seen massive growth across the globe. Nearly every person in America has a credit or debit card of some form. Additionally in 2004, the use of credit and debit cards surpassed cash and checks as the most commonly used form of payment in the US.